2017 FEHB Premiums for Self + 1

View this article online at http://www.fedsmith.com/2017/02/16/2017-fehb-premiums-for-self-1/
By on February 16, 2017 in Pay & Benefits with 0 Comments

Image of health insurance claim form with a stack of $100 bills on top of it

Last year, feds were concerned about the unexpectedly slight savings in the new Self + 1 premiums compared to the Family premiums. There was quite a bit of commentary, but I did not see any satisfactory explanation.

So, how is it this year? Below I have listed the data by annuitant premium (monthly), from lowest to highest, national coverage only.

Self Self + 1 % Increase Family % Increase Over Self+1 Carrier/Option
$95.25 $206.03 116 $206.60 0.3 NALC/Value
116.06 251.06 116 251.62 0.2 NALC/CDHP
116.70 250.90 115 275.98 10 GEHA/Standard
122.85 264.14 115 290.54 10 GEHA HighDed.
129.44 306.69 137 312.82 2 MHBP Value
133.83 267.13 100 279.37 5 Panama Canal
133.92 294.62 120 321.40 9 APWU/CDHP
139.62 341.99 145 345.40 0.9 Foreign Service
143.36 317.26 121 333.11 5 MHBP Consumer
147.08 338.56 130 341.81 1 MHBP Standard
154.32 356.72 131 376.12 5 Blue Cross/Basic
158.07 360.14 128 363.57 0.9 SAMBA Standard
167.70 381.74 128 363.76 -4.7 NALC
179.03 312.92 75 319.18 2 Rural Carrier
182.84 428.02 134 496.89 16 Compass Rose
204.29 406.75 99 548.39 35 APWU/High
219.83 509.36 132 568.91 12 GEHA/High
229.64 521.67 127 550.84 6 Blue Cross/Standard
372.68 845.67 127 952.49 13 SAMBA/High.

Note the sharp difference between the percent increases, by level.

Adding one person to Self only results in increases ranging from 75% to 145%, while adding one or more persons to Self + 1 raises the premium by just 16% or LESS (sole exception: APWU High, at 35%), including one decrease of 4.7% (NALC)!

Children are the primary additions to the Family level, and children are healthier with lower health costs than adults. This would cause Family to be lower cost per capita (i.e., lower premiums) than the other two levels.

However, this apparent advantage of Family would be more than offset by the fact that Medicare pays the hospital bills (and doctor bills, too, when there is Part B) of those who qualify for Medicare. There are approximately 1.9 million annuitants, annuitant dependents, and annuitant survivors under Medicare. Virtually all who were in Family moved to Self + 1, carrying with them the “Medicare dividend,” so this is a rather substantial offset to the cost of Self + 1.

Despite the strong countervailing effect of Medicare paying most bills, the glaring inconsistency between levels persists, i.e., premiums for Self + 1 are only slightly lower than Family premiums.

If there is a legitimate explanation for this inconsistency, why – considering the great interest by so many – has OPM not provided it?

In the absence of an explanation, it is not unreasonable to believe the FEHB insurance companies are simply being allowed to pocket the unearned premiums, instead of using them to lower premiums for all. If this is not correct, please advise.

© 2017 Robert F. Benson. All rights reserved. This article may not be reproduced without express written consent from Robert F. Benson.

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About the Author

Robert Benson served 35 years in various Federal agencies, as both a management analyst and IT specialist. He is a graduate of Northwestern University.

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